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The Effect of Fertility Reduction on Economic Growth
Quamrul H Ashraf1, David N Weil2, Joshua Wilde3
1Williams College and Harvard Kennedy School.
Population and Development Review
|December 20, 2014
Summary
Reducing fertility rates can significantly boost economic growth. Lowering fertility, as simulated, can increase per capita output by nearly 12% in 50 years, enhancing living standards.
Area of Science:
- Demographics
- Macroeconomics
- Development Economics
Background:
- Global fertility rates are declining, with significant economic implications.
- Understanding the impact of fertility on per capita output is crucial for policy-making.
Purpose of the Study:
- To quantitatively assess the impact of reduced fertility on per capita output.
- To model the multifaceted economic effects of fertility changes.
Main Methods:
- Developed a simulation model incorporating schooling, population dynamics, capital accumulation, and resource constraints.
- Parameterized the model with microeconomic data, developing country demographics, and macroeconomic theory.
- Simulated a shift from UN medium-variant to low-variant fertility projections for Nigeria.
Main Results:
- A fertility reduction scenario is projected to increase per capita output by 5.6% within 20 years.
- Over a 50-year horizon, the same fertility reduction is estimated to raise per capita output by 11.9%.
Conclusions:
- Exogenous reductions in fertility can lead to substantial long-term increases in per capita output.
- Policy interventions aimed at fertility reduction may yield significant economic benefits, particularly in developing nations.
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